Spain's Rajoy backs Greek austerity before poll

AP News
Posted: Jan 14, 2015 12:38 PM
Spain's Rajoy backs Greek austerity before poll

ATHENS, Greece (AP) — Spain's Prime Minister Mariano Rajoy on Wednesday defended Greece's tough bailout program, ahead of a general election here that could see his fellow conservatives lose power to leftwing challengers.

During a visit, Rajoy met conservative Greek Prime Minister Antonis Samaras and said cost cutting reforms in their two countries "got results."

Samaras' New Democracy party faces elections on Jan. 25 and is trailing in opinion polls to the anti-austerity, leftwing Syriza party, which is demanding that at least half of the Greece's 240 billion euro ($283 billion) bailout loans be forgiven.

Rajoy also faces general elections this year, with a challenge from a similarly popular leftwing radical party, Podemos.

"I am here to defend policies that were tough, that were complicated, that essentially created ... the need to take decisions which leaders don't normally want to take," Rajoy said.

Austerity measures in Greece and Spain caused a surge in poverty and joblessness, but employment figures improved in both countries last year.

Political uncertainty in Greece has renewed fears it could be forced out of the eurozone, though market concerns have eased in recent days.

"The likelihood of a Greek exit is still lower than during the peak of the crisis in 2012 and remains relatively unlikely," the ratings agency Moody's said Wednesday.

In return for bailouts, Greece committed to make budget cuts to reverse its deficits. But preliminary figures from the finance ministry on Wednesday showed the country missing fiscal targets for 2014, with revenues 7.2 percent lower than projected. That is partly due to a frozen payment of European Central Bank funds, after Greek negotiations with bailout creditors were suspended pending the elections.

Stephen Moore

The January-December budget deficit was 3.6 billion euros, compared with a 761 million budget target. The primary surplus, which excludes the costs of paying interest on loans, was 1.9 billion euros — below the projected 4.9 billion euros.

Syriza leads with 32.4 percent support, while New Democracy is second with 28.9 percent, according to a new poll to be published Thursday by the weekly To Pontiki.


AP writer Nicholas Paphitis in Athens contributed.